Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family X has income of $100,000 while Family Y has income of $40,000. The marginal tax rates faced by the two families are
A. 30 percent on X and 20 percent on Y.
B. 40 percent on X and 10 percent on Y.
C. 30 percent on X and 30 percent on Y.
D. 40 percent on X and 20 percent on Y.
Answer: D
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The stability of cartel prices is challenged because
A. cartels never exist. B. though they increase profits, they are vulnerable to those that seek to make more profit by breaking the agreements that generated them. C. though they increase profits, they are vulnerable to egalitarian interests. D. they never increase the profitability of their members.
Imports are products produced in the home country and sold in another country.
Answer the following statement true (T) or false (F)
Along a given indifference curve, a consumer reduces the quantity of one good in favor of more units of the other. In this situation
A. total utility rises. B. the marginal utility of the first rises and the marginal utility of the second good falls. C. the marginal rate of substitution falls. D. both A and B are correct.
The unemployment rate was falling during all of the years that I was a student, but as soon as I graduated, the unemployment rate started to rise. Therefore, the job market was waiting until I started looking for employment to start to go bad. This statement is an example of
A. fallacy of logic. B. fallacy of inductive reasoning. C. ceteris paribus fallacy. D. post hoc, ergo propter hoc fallacy.